However, once a company adds new employees and begins to locate people away from headquarters, the CEO must define and communicate the culture and the company must use it to make key decisions and act.
Culture is crucial for a startup as it expands because--if done correctly--it guides people to take independent action in response to threats and opportunities. This culture works best if the company hires people with the potential to be successful entrepreneurs--turning their jobs into a real-world training ground for creating and building a new business.
Here are the seven keys to scaling your company's culture as it grows.
A company's founder has innate beliefs and values which shape its culture. If the founder has achieved success in previous endeavors, those values have contributed to the success and could be the foundation for the current startup's success.
Think about what matters to employees and customers.
The CEO's values will only work if they motivate employees to act in the company's best interests, which should be tied to what will help the company create and keep customers.
Simply put, the right values for a startup are at the intersection of three sets:
- The founder believes in them.
- They'll attract talent.
- They'll motivate talent to make customers better off.
Once the company finds the four to six values at the intersection of those three tests, the founder should write them down, get feedback from others to improve them, and then begin using the values to shape how people in the company act.
Create and tell stories that illustrate the values.
People tend to remember well-told stories. So, the founder should build a collection of stories to tell current employees and those that the company seeks to hire - stories that make it clear what kind of behavior embodies each of the values.
The founder should tell these stories regularly - and as the company grows and adds new employees, the company should add more stories that reflect recent examples of how people have done things that embody the company's values.
Model the values.
The CEO can influence employee behavior through the way she behaves. If the CEO consistently and visibly takes actions that are consistent with the company's values, employees will realize that they ought to do the same.
If the CEO behaves in ways that contradict those values, employees are more likely to be demoralized, lose respect for the CEO and the management team, and possibly seek employment elsewhere.
Use values to hire, promote, and let people go.
The company should also turn its values into action by using the culture to hire, promote, and let people go.
Simply put, the company should use cultural fit to screen in people who it wants to hire. And once hired, the company should reward individuals who embody its values and let go those who act in ways that undermine those values.
Regularly celebrate and reward people who embody values.
As it grows and adds new people, the company ought to have more formal ways to make sure that everyone understands the culture. For example, a company should hold regular meetings to recognize publicly individuals who have taken action that is consistent with the company's values.
By holding regular meetings, the CEO can keep the culture alive--get feedback on what aspects of the culture are working most effectively and which need to be changed. Such feedback enables the CEO to reshape the culture as needed to achieve better results
A good example of a culture that scales is Boston-based business catering service, ezCater, founded in 2007, which was valued at $1 billion when it raised $100 million in June 2018.
ezCater's culture is based on the "growth mindset" idea that its CEO Stefania Mallet learned from Eve Grodnitzky, president at Eve Meceda LLC. As Mallett told me last year, "My cofounder and I are tinkerers. We ask, 'Can we make it go faster?' We come up with hypotheses, build a model, try it, track it, and learn from what works and what doesn't. We try to stay ahead of the curve rather than lag it. This growth mindset is at all levels of the company and it means that everyone shares responsibility for achieving growth."